When it comes to the logistics industry, there are any number of factors that can affect your bottom line. For starters, there’s supply chain delays. Next there are increasing gas prices. Beyond that are things like inaccurate charges, late shipments, or even shipments that get lost altogether. While some of these variables might be out of your control, there are still ways for you to get proactive when it comes to saving money. That’s where logistics optimization comes in.
Logistics optimization can encompass many different factors. It might look at how to optimize your supply chain, how to cut your shipping costs, packaging and distribution, and more. At ShipSigma, we believe one of the most critical components of logistics optimization is the parcel invoice audit…making parcel audit software one of the most important parts of logistics optimization software. In this blog, we are going to break down logistics optimization software more generally, but apply it through the example of a parcel audit.
What Is Logistic Optimization?
In short, logistic optimization covers everything in the supply chain. This includes everything from sourcing raw materials all the way to delivery of a product to the end user as a part of the logistics optimization criteria. The goal of logistics optimization is to observe and investigate all of the steps and processes in the supply chain and assess opportunities for improvement. That might mean finding ways to streamline or automate work, opportunities for increased output, or areas to reduce costs. So then how do you optimize logistics?
One (very important) step in optimizing logistics is the parcel invoice audit. A parcel audit looks at all of your transactions with your carrier (we’re talking UPS or FedEx) and alerts you to instances where you overpaid. These might be cases where you were charged incorrectly, or they might be instances where the carrier failed to uphold their end of the contract you two negotiated. In those cases, you might be looking at things like:
Once you identify the areas of concern though, you can address them both in the form of a refund and in making sure you address any recurring shortcomings.
Whether it’s a parcel invoice or another area of the supply chain, one of the best ways to optimize logistics is with logistics network optimization software.
What Is Logistical Software?
Logistical software takes logistics optimization and automates it. Essentially, logistical software processes and analyzes your data for you without human intervention. It will use logistics optimization algorithms to really dissect your data across multiple points. Then with the insights the software produces, you can take informed action to increase your efficiency along the supply chain. The ultimate goal of logistical software is logistics cost optimization, or spending exactly the amount you need to and no more.
To bring this back to the example of a parcel invoice audit, parcel auditing software will look at your data for you. This negates the need for a manual, labor intensive, audit. Then with the software highlighting areas of overspending or lackluster service, you can reduce your shipping costs. This might come in the form of refunds or leverage at the negotiating table.
With the right auditing software, you can tell exactly what you are paying by shipment. With a third-party expert using AI to power and manage that software, you can determine whether or not you are getting a fair rate. With those insights, you will be able to negotiate a better deal with your carrier and get on the path to the larger logistics optimization tasks.
Which Is the Best Software for Logistics Optimization?
When it comes to optimizing your logistics approach, ShipSigma is a great place to start. With ShipSigma, you get access to two things…our team and our software.
Is passionate about logistics
Has years of industry and carrier experience and knowledge
Wants to create a transparent and level playing field around logistics
Is eager to earn your trust and share our wisdom
Automatically audits your parcel invoices
Detects discrepancies and files claims
Saves you money on every single item
Arms you with the data you need to negotiate the best carrier deal possible